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Founded 1936 | Issue 4 - 2016
Members Need to be Aware of Important Changes to Minimum Wage, Sick Leave Laws

From the Arizona Licensed Beverage Association

ALBA) Here are the proposed items that we would like to have considered for 2017:

  1. Identifying those liquor violations, applicable to retailers, that could be subject to a statutory administrative adjustment that includes a fine and an employee training requirement; upon the completion of these items, the complaint would be dismissed and eliminated from the retailers record (similar to a traffic ticket).
  2. Possible modification of the special event license provisions to provide more oversight and supervision—yet to be determined.
  3. There are three types of acts of violence—act of violence, repeated act of violence, and serious act of violence. ALBA would like to consider re-designating “act of violence” to a different term, such as: “act of aggression”.

There may be other items that are brought to our attention. ALBA is looking forward to working with Steve and Don on the 2017 liquor omnibus bill.

The following important information came from Steve Duffy, Attorney at Law (and one of our Associate
Members) regarding Proposition 206: “The Fair Wages and Healthy Families Act”- passed at the General
Election on November 8, 2016, with nearly 60% of the vote. ALBA members need to be immediately aware of the
two major things this Act does.
1. Effective January 1, 2017, the state minimum wage is increased to $10.00 ($7.00 for tipped employees) and
will increase annually thereafter.
2. Effective July 1, 2017, employees are required to provide one hour of sick leave for each 30 hours worked.
Below is a more detailed summary of the Act, highlighting those portions that are most important to ALBA
members. How the Act applies to any specific member’s business will require careful analysis by human resource
or legal professionals, but this should help members understand the general.
Minimum Wage - The Act raises the state minimum wage (currently $8.05/hr) to $10.00 beginning January 1,
2017. It then increases to $10.50 for 2018, $11.00 for 2019 and $12.00 for 2020. Thereafter, it will increase every
January 1 by changes in the cost of living. The minimum wage for tipped employees is $3.00/hr. less than the
minimum wage for non-tipped employees. For purposes of the minimum wage, employees do not include children
or siblings of the employer. It is unclear whether this would include a child or sibling of the owner of a corporation
or limited liability company. The minimum wage provision applies to all employees, which includes independent
contractors if considered to be employees under the Federal Fair Labor Standards Act. Small businesses (defined
as those with less than $500,000 in gross annual revenue and exempt from the federal minimum wage laws) are
exempt from the state minimum wage. As this was not changed by the Act, if your business is currently subject to
the existing state minimum wage, it will be subject to the increased minimum wage.
Paid Sick Leave - The Act requires employers to provide employees with "earned paid sick time" for certain
medical related absences. The sick leave requirement is effective July 1, 2017. Employees “earn” one hour of sick
leave for each 30 hours worked. The definition of employer is somewhat different than for the minimum wage; the
“small business” exemption does not apply to the sick leave requirement. However, in companies with fewer than
15 employees, an employee cannot use or accrue more than 24 hours of sick leave per year; in companies with 15
or more employees, an employee cannot use or accrue more than 40 hours of sick leave per year. (Employers are
free to exceed these numbers at their discretion.) As with the state minimum wage, employees do not include
parents or siblings of the employer, but it is also unclear how it applies to a family-owned corporation or LLC.
Unused sick time would carry forward to the following year, subject to the limitations on accrual. Employers may
pay employees for unused sick time at the end of the year (any regular 12-month period determined by the
employer) and provide the employee with the required amount of sick time for use in the following year. An
employee is not entitled to payment for unused sick time upon leaving employment. Sick leave may be used for:

  • an employee’s medical care or mental or physical illness, injury or condition,

  • an employee’s need to care for a family member with a mental or physical illness, injury or condition or a

  • family member who needs medical care

  • a public health emergency - an absence caused by the abuse of a child or vulnerable adult, domestic violence,  sexual violence or stalking.

Employers may require reasonable documentation for 3 or more consecutive days of sick time. Employees may
use sick time as it accrues, but an employer may require employees hired after July 1, 2017 to wait 90 days from
their date of hire before using accrued sick time. The employee cannot be required to find a replacement worker to
cover the employee’s hours. Employers may not retaliate or discriminate against employee who use required sick
leave. Employers are required to provide notice of the employee’s rights to sick leave on July 1, 2017 or on the
employee’s hiring, if later. The Industrial Commission, which enforces this provision, will provide employers with
model notice language. Employers must retain pertinent records and ensure that information regarding the reason
for the sick leave (that is, information about the employee or family member’s health, or information regarding
domestic or sexual violence, abuse or stalking) must be kept confidential and only released to the employee or at
the employee’s direction. Employees under a collective bargaining agreement (i.e., union employees) are not
covered by this provision. This is a state minimum requirement. Local jurisdictions may adopt more generous sick
leave requirements. The above constitutes a summary of the most important provisions, and application of them to
any particular situation should be carefully considered. This summary should not be considered as legal advice to
members. Please do not hesitate to contact me at the ALBA office 602-285-1092, or Steve Duffy at 623-547-7310
if you have any questions.

 800-453-5232 / 602-285-1092